Evaluating Leadership Styles and Customer Satisfaction in SMEs (PDF)

EVALUATING THE RELATIONSHIP BETWEEN LEADERSHIP STYLES AND CUSTOMER SATISFACTION OF SMALL MEDIUM ENTERPRISES A Qantitative Research Submitted to the Faculty and / Staff of Fatima National High School...

EVALUATING THE RELATIONSHIP BETWEEN LEADERSHIP STYLES AND CUSTOMER SATISFACTION OF SMALL MEDIUM ENTERPRISES A Qantitative Research Submitted to the Faculty and / Staff of Fatima National High School General Santos City In Partial Fulfillment of the Requirements for the Subject Practical Research 2 By: Abedin Nhor Ann Bareja Rhea De Guzman Mark Ivan Diaz, Elaijha Orgada Aliah Grace Pina Aljhuhanni and Sendad Hidaya  CHAPTER l INTRODUCTION Backround of the study According to (Mustagim, 2016) A leader and his way of dealing with followers is a determining factor in achieving organizational goals while also influencing the quality of services provided to customers. Service quality is closely related to the level of employee motivation in organizations, considering that motivation encourages and increases employee engagement. This is related to the leadership style used toward followers. Increasing the level of quality of services and products and continuous improvement are essential for business de-velopment. This is even more evident in the highly competitive and changing environment of banks, which are also concentrated on the continuous development and training of employees to achieve a satisfactory level of service quality (Kumar et al., 2022). Environmental characteristics such as workplace size, number of em-ployees, market nature, market competitiveness, and organizational culture play an essential role in motivating bank employees and enhancing the quality of their activities (Delié et al., 2017). In addition, transformational leadership and leader-member exchange (IMX) positively affect the quality of services. Leadership is a "mysterious" concept. Like many complex ideas, it is easy to use in everyday conversation. Everyone talks about it, but only few really understand it. Most people want it, few achieve it. What does this fascinating term called 'leadership' mean? In the studies on leadership, there are hundreds of definitions offered in the literature, but none of them has been selected as a foundation of this concept (Winston and Petterson, 2006). One can say that there is no consistency on the definition on leadership, due to the researchers' different perspective and aspects of this phenomenon. Schneider (1987) states that building people in the company is the key element, while building a successful company. Therefore, the greatest power of one leader is the capacity he/she possesses to create future leaders. They have to inspire their followers to achieve not only the common goal of an organization, but also their own, in a modest manner. The very idea of leadership presumes the existence of a follower. The activity of leadership cannot be done without followers who will follow the leader and leader who will influence their behavior, beliefs and feelings of group members in an intended direction (Wright and Taylor, 1994). Parris at al. (2013) considered leadership as a skill used in order to influence the followers in an organization and to work devotedly. The researchers conduct this study because we want to know the relationship between leadership styles and customer satisfaction in the leadership styles of small medium enterprises of Fatima National High School. Statement of the problem Through this study the researcher aimed to know the relationship between leadership styles and customer satisfaction of small medium enterprises. The researcher will be guided by the following questions: 1. What is the leadership style of small medium enterprises owner in terms of: 1.1 Strategy 1.2 Performance 1.3 Customer Satisfaction 2. What is the level customers satisfaction among SME in Brgy. Fatima? 3. Is there a significant relationship between leadership style ad customer satisfaction among SME in Brgy. Fatima? Significance of the study This study determines the students in Evaluating the relationship between leadership styles and customer satisfaction of small medium enterprises. This well conducted to help the following: To the student: this study concerns the students about evaluating the relationship style and customer satisfaction of small medium enterprises so that the students are aware and have knowledge about how this Study exists. To the business owner: this is to monitor and help to understand their child about evaluating the relationship style and customer satisfaction of medium enterprises. To the future researcher: this study would help them to assess those students to learn more in evaluating the relationship style and customer satisfaction is small medium enterprises. And they can help to explain to the Learners about the importance of how this study can help them. Scope and delimitation The main purpose of this research is to evaluate the relationship between Leadership Styles and the Satisfaction of their Customer in Barangay Fatima General Santos City. This study is mainly focuses on the factors of leadership styles and the effect of this in the customer satisfaction. This study is limited to 30 randomly selected small medium enterprises owners in Barangay Fatima General Santos City of the school year 2024- 2025.  CHAPTER ll REVIEW OF RELATED LITERATURE AND STUDIES This chapter discusses the materials we gathered from the internet sources and books relevant to our study. Strategy The need for more effective firm level strategies for SMEs to achieve competitive advantage. According to Rosario et al., (2023) Business dynamics are also found in the digital economy, forcing the development of new business models to achieve strategic marketing excellence. It was verified that half of the world’s population is present in social media platforms. Social media can help organizations gain insights into markets and improve business intelligence. Social media is a flexible medium that companies can use in marketing strategies and build engagement and develop a communication plan and monitor performance. Marketing strategies in social media is a strategy to communicate brands, services, products, and ideas. In additional Rehman et al., (2019) Increased competition has highlighted the need for more effective firm level strategies for SMEs to achieve competitive advantage. In fact, SMEs face higher risks in terms of globalization because of their limited resources and small size. This study highlights the importance of business strategy in SME performance with the mediating role of enterprise risk management. A structured questionnaire was used to collect data from 327 Pakistani SMEs. The hypotheses are tested using Structural Equation Modeling (SEM) in AMOS. The results indicate that business strategy has a significant influence on SME performance and enterprise risk management. In addition, enterprise risk management partially mediates the relationship between business strategy and SME performance. This study finds that firms with a unique business strategy endorse formal risk management practices which in turn facilitate superior performance in the market. Implications for practices are discussed. Bharadwaj et al., (2013) Over the last three decades, the prevailing view of information technology strategy has been that it is a functional-level strategy that must be aligned with the firm's chosen business strategy. Even within this scaled alignment view, business strategy directed IT strategy. During the last decade, the business infrastructure has become digital with increased interconnections among products, processes, and services. Across many firms spanning different industries and sectors, digital technologies (viewed as combinations of information, computing, communication, and connectivity technologies) are fundamentally transforming business strategies, business processes, firm capabilities, products and services, and key interfirm relationships in extended business networks. Accordingly, we argue that the time is right to rethink the role of IT strategy, from that of a functional-level strategy-aligned but essentially always subordinate to business strategy-to one that reflects a fusion between IT strategy and business strategy. According to Sharma et al., (2018) The Success or failure of modern business organizations depends on the quality of their human resources. Hossain et al., (2023) A sustainable financing strategy for SMEs should aim to enhance a low-cost collateral-free supply of loans to SMEs with good track records of repayments to banks. In this paper, we suggest two alternative financing models for SMEs that address certain borrowing constraints of SMEs. First, the model incorporates institutional mechanisms involving the government, banks, and SMEs. The strategy employs a two-pronged approach: (i) the government enhances the supply of loanable funds to banks, and (ii) identifies good SME borrowers through skills development programs and introduces them to banks. This model will reduce default risk and allow banks to offer lower-interest and collateral-free credit to SMEs, thereby improving their access to finance and performance. Second, the model could be extended to accommodate digital finance using a data-driven credit risk score of the borrowers to reduce banks’ default risks and transaction costs with or without government funds. The proposed model could resolve the moral hazard and selection bias problems. Our proposed models are based on a public-private partnership approach and therefore could solve certain borrowing constraints of SMEs. Our empirical results support the model outcomes and therefore are consistent with the predictions of our theoretical models. According to Conz E et al., (2017) The purpose of this paper, according to the evolutionary perspective of resilience, is to provide a revised adaptive cycle model that explains how organizations that are embedded in a local system can foster their resilience. Design/methodology/approach: An exploratory case study analysis was carried out. The study adopted the methods and principles proposed by Eisenhardt (1989). Case studies were selected according the match-pair method and consist of two Italian wineries operating into the same wine cluster. Qualitative and quantitative data were collected and analyzed through descriptive statistics and qualitative data analysis techniques. Findings: The study proposes a revised model for the resilience strategies of small and medium- sized enterprises (SMEs) which combines firm and cluster level. Findings show that the resilience of SMEs is primarily driven by internal resilience strategies, and their surviving and adapting capacity, from a certain point of the evolutionary cycle, is fostered by internal decisions rather than by the influence of the external environment. Research limitations/implications: The study has some limitations. In particular, the exploratory survey does not permit the generalization of results, and further empirical evidence is required. This research represents an initial step toward the development of a more exhaustive understanding of how the relationship SMEs-cluster can positively or negatively affect the resilience of organizations. Practical implications: The proposed model for the resilience strategies of SMEs offers also insights for managers and entrepreneurs. Originality/value: This study significantly contributes to theory on resilience in the management field, that is largely related to economic geography, while investigations about the resilience at the firm level are limited and inconclusive. Performance According to Zhou G et al., (2022) At present, more and more attention is paid to the sustainable development of enterprises. In particular, in the context of frequent financial crises and COVID-19 pandemic, how the performance of listed companies' environmental, social, and governance (ESG) affects the company's market value has attracted widespread attention. In addition Awan et al., (2020) The performance management system effectiveness (PMSE) was determined by the extent of its accuracy and fairness, as recommended by previous researchers. A sample of 285 employees was selected from various branches of private banks located across Pakistan. A structured questionnaire was used, which was validated through confirmatory factor analysis (CFA) in the Pakistani context. The results indicated a significant impact of PMSE and work engagement on task and contextual performance of employees. Also, complementary mediation of employee work engagement in the relationship between PMSE and employee performance (in terms of task and contextual performances) was also supported. The findings of the research are helpful for the development of HR and PMSE strategy in the private banks of Pakistan. The study also suggests that a comprehensive PMSE model including the perception of fairness as a mandatory part, may be introduced for employees’ enhanced work engagement and task/contextual performance. In addition, Krijigsheld et al., (2022) To do so, organisations must influence employee job performance. Therefore, it is necessary to know what the key dimensions of job performance in healthcare are and how these dimensions can be improved.  This study has three aims. The first aim is to determine what key dimensions of job performance are discussed in the healthcare literature. The second aim is to determine to which professionals and healthcare organisations these dimensions of job performance pertain. The third aim is to identify factors that organisations can use to affect the dimensions of job performance in healthcare. Rajapathirana et al., (2018) Insurers are well versed in the litany of challenging conditions facing the sector. These challenges are economic, political, regulatory, legal, social, and technological. As a result of those pressures, the industry is experiencing increasing competition, muted growth, and an excess of capital. The increased connectivity among household and workplace devices, the development of autonomous vehicle and the rising threat of cyber-attacks are transforming the way people live and risk they need to mitigate with insurance products. Customer Satisfaction According to Agarwal et al., (2023) The quality of cloud service is an important aspect to the success of any global business in today's world. The objective of this paper is to find the factors of the cloud service quality and assess the impact of service quality on customer satisfaction and loyalty. A survey of 419 cloud experts/users was conducted in India by means of an organized survey instrument/questionnaire based on Likert scale. The respondents were the cloud experts/users using the services of top 5 cloud service providers of India. Research hypotheses were tested using partial least squares structural equation modeling. The study found that agility, assurance of service, reliability, scalability, security, service responsiveness, and usability all have a positive and significant effect on overall cloud service quality. The research revealed the partial mediation effect of customer satisfaction amid service quality and customer loyalty. It is noticed that service quality has positive and significant link with customer loyalty and customer satisfaction. This establishes the partial mediation effect of customer satisfaction on the link between service quality and customer loyalty. Finally, the paper recommends cloud experts/users/service providers to give specific attention to these factors when migrating to cloud services. In addition, Dam S, (2021) With the current fierce competitive situation, competing businesses have continually provided a superior quality of service, and an excellent perceived brand image to gain customer satisfaction and customer loyalty. Hidayat K et at., (2023) Basically, relationship marketing focuses more on creating customer value through interaction with customers to get information regarding evaluation of customer needs and expectations on an ongoing basis. Interaction with customers must be conducted, because customer involvement can increase customer value, so that the company can meet their expectations and needs. Dewi et al., (2021) Basically, relationship marketing focuses more on creating customer value through interaction with customers to get information regarding evaluation of customer needs and expectations on an ongoing basis. Interaction with customers must be conducted, because customer involvement can increase customer value, so that the company can meet their expectations and needs. Balinado J. et al., (2021) Basically, relationship marketing focuses more on creating customer value through interaction with customers to get information regarding evaluation of customer needs and expectations on an ongoing basis. Interaction with customers must be conducted, because customer involvement can increase customer value, so that the company can meet their expectations and needs. Related studies On Evaluating the Relationship Between Leadership Styles and Customer Satisfaction in Small and Medium Enterprises The relationship between leadership styles and customer satisfaction has been a significant area of research, especially within the context of small and medium enterprises (SMEs). Leadership in SMEs is particularly critical due to their unique operational challenges and resource constraints. This literature review explores various studies that investigate how different leadership styles impact customer satisfaction in SMEs. Studies, including those by Saks (2006) and Harter et al. (2002), demonstrate that engaged employees are more likely to deliver superior customer service. A recent study by Kim and Park (2021) showed that transformational and servant leadership styles significantly enhance employee engagement in SMEs, which in turn leads to increased customer satisfaction. The impact of cultural context on the relationship between leadership styles and customer satisfaction has also been examined. Research by Hofstede (1980) indicates that cultural dimensions, such as individualism versus collectivism, can influence leadership effectiveness and customer satisfaction. A comparative study by Chen et al. (2018) across different countries revealed that in collectivist cultures, servant leadership was more strongly correlated with customer satisfaction than in individualistic cultures, where transformational leadership had a more pronounced effect. The literature suggests a complex relationship between leadership styles and customer satisfaction in SMEs. Transformational and servant leadership styles are consistently linked to higher levels of customer satisfaction, primarily through their positive effects on employee engagement and organizational culture. Conceptual framework INDEPENDENT VARIABLE DEPENDENT VARIABLE LEADERSHIP STYLE CUSTOMER SATISFACTION Figure 1, The Independent variable is the leadership style while the dependent variable Customer Satisfaction differs depending on personal perceptions, therefore a product that pleases one consumer could not please another. The degree of pleasure that each consumer receives varies depending on a variety of factors, including past experiences, personal expectations, and the quality of the service or product received. Hypothesis of study Leadership styles have no significant effect on customer satisfaction of small medium enterprises at Brgy. Fatima, General Santos City. Defenition of terms Some terms and variables that are used in this study are defined and interpreted to clarify the discussion and promte a clear and better among the benefeciaries and other sectors interested in the study. The terms are as follow: Leadership Styles: Refers to the various approaches leaders use to guide, motivate, and manage their teams, including transformational, transactional, democratic. Customer Satisfaction: A measure of how products and services meet or exceed customer expectations, often influenced by leadership effectiveness and employee engagement. Small and Medium Enterprises: Businesses with a limited number of employees and revenue, typically characterized by their smaller scale compared to larger corporations. Relationship Evaluation: The process of assessing the correlation between leadership styles and customer satisfaction, often involving quantitative and qualitative research methods to analyze data from employees and customers.